Flare Fragrances Recommendation Memo

To: Joely Patterson

Subject: Flare Fragrances Launch Recommendation

Background

Founded in 1955, Flare Fragrances grew to be No. 4 in the U.S. women’s fragrances market with its focus largely on the brand Loveliest. Flare brands fall into the mid-tier brands, originating in department stores and later selling in mass and discount department stores. Flare will earn an anticipated 10% of the retail market in 2008 with an estimated $221 million in factory sales, but the market has experienced a 3% overall annual decline. With Flare Fragrances experiencing declining sales growth, CEO Joely Patterson has set the goal to increase incremental revenue by at least $7.5 million and reverse the declining sales trend. Flare must decide if it wants to release the new brand Savvy or focus on promoting Natural before launching into 2009 sales.

Recommendation

To meet the target goal of $7.5 million, Flare should not launch Savvy and instead concentrate on increasing sales of Natural in 2009. The fragrance should be promoted toward a younger demographic of women ages 18-34 years old. This will be achieved using the Savvy advertising budget to increase marketing promotion of Natural under the Lovely perfume line. The fragrance should also be sold in drug stores to further penetrate the drugstore channel and younger market.

Rationale

1. Flare should promote Natural to a younger demographic. Women ages 18-34 are highly brand aware with sensitivity to premium and prestige branding and prefer images of elegance and exclusivity (Ex. 5). Natural promotion should be geared towards this younger demographic under the brand Loveliest, which has a strong brand image and well-known products in the prestige market for women ages 34-65 (Table B). By gearing advertising and promotions to women ages 18-34 under the Loveliest umbrella, Natural can permeate this younger market who are willing to try new scents and often become loyal to a new scent over time (Table B) and expand its current...